A kombucha brewer sells the same tea four ways, and the margins run from thin to wide. A bottle at a market earns well; a bottle to a grocer earns little, because the glass bottle and cap cost more than the kombucha; and a keg to a café or bar earns the most per ounce because it skips the bottle. Margin = (price − cost) ÷ price. In the example below, a 16-ounce bottle costs $1.87 to make and sell at a market and goes for $4.50, a 58.6% margin. A month of four ways of selling brings $18,050 of sales and about $9,520 of gross profit.
The short version
- Margin = (price − cost) ÷ price; markup = (price − cost) ÷ cost.
- Count your time as a cost, even if you don't pay yourself yet.
- A 16-ounce bottle at a market: $1.87, $4.50, 58.6%.
- The bottle and cap cost more than the kombucha in them.
- Kegs skip the bottle and earn the most per ounce.
- Grocer bottles move volume at a thin margin.
- TaroStack costs each bottle from what each batch used. More below.
A bottle, costed
Brightwater Ferments, the made-up kombucha maker in Portland, Oregon, I use in these examples, brews about 500 gallons a month:
| A 16-ounce bottle, at a market | Cost |
|---|---|
| Tea, sugar, culture and flavor | $0.55 |
| Bottle and cap | $0.71 |
| Labor | $0.47 |
| Card fees, 3% of $4.50 | $0.14 |
| Cost | $1.87 |
What the brewery looks like over a year is in kombucha business plan, and the bottle's full unit cost in unit cost formula.
Margins by channel
| Product | Sold where | Price | Cost | Gross profit | Margin |
|---|---|---|---|---|---|
| Kombucha, 16 oz | Farmers market | $4.50 | $1.87 | $2.64 | 58.6% |
| Kombucha, 16 oz | Grocers, wholesale | $2.50 | $1.73 | $0.77 | 30.8% |
| Keg, 5 gallons | Cafés and bars | $110.00 | $29.20 | $80.80 | 73.5% |
| Growler fill, 64 oz | Farmers market | $14.00 | $3.32 | $10.68 | 76.3% |
The keg earns 73.5% against 30.8% for a grocer bottle: 40 bottles' worth of kombucha with no glass.
A month's numbers
A month at Brightwater Ferments:
| Product | Units | Sales | Gross profit |
|---|---|---|---|
| Kombucha, 16 oz, farmers market | 900 | $4,050 | $2,372 |
| Kombucha, 16 oz, grocers | 3,000 | $7,500 | $2,310 |
| Keg, 5 gallons, cafés and bars | 40 | $4,400 | $3,232 |
| Growler fill, 64 oz, farmers market | 150 | $2,100 | $1,602 |
| Month | $18,050 | $9,516 |
The grocer bottles are three quarters of the volume and less than a quarter of the gross profit; the kegs, 40 a month, bring more. The safety plan behind every batch is in kombucha HACCP plan.
Get the calculator
Download the kombucha margin calculator. One sheet: one line for each product and channel, with its price, materials, packaging, labor and fee rate; the cost, gross profit, margin, markup and the price your target margin needs fill in. It's an ordinary Excel file with no macros, and it works in Google Sheets, LibreOffice and Numbers.
Where this stops working
The calculator holds one cost a bottle. A batch that over-ferments and is poured out, and glass bought at a new price, move every channel's margin.
How TaroStack does it
TaroStack costs each bottle from what each batch used, so margins sit on real cost.
True cost from the batch. Each batch takes tea, sugar and bottles at the price of the deliveries they came from, so a price rise shows in the next batch's cost.
Labor on the batch. The minutes a batch took are recorded on it, so the hours behind each product are on record.
Margins by product. Margins are reported per product on that actual cost, and a price-creep report per supplier shows whose prices moved.
| The job | Spreadsheet | In TaroStack |
|---|---|---|
| What a bottle cost | One price from last season | Cost from the batch's deliveries |
| The hours behind a batch | Remembered | Labor minutes on the batch |
| An ingredient creeping up | Noticed late | A price-creep report |
| Margins by product | Re-worked by hand | Margins on real cost |
Recipes, batches, costing and margin reports are on every plan, from $49 a month. The first 30 days are free, with no credit card. If you'd like a hand setting up, ask, and we'll do it with you.